The EU must bring more balance into the supply chain, introduce better tools against market disturbances and help dairy farmers find new outlets for their produce, the European Agriculture Committee said in a draft non-binding resolution adopted earlier this week.
This is crucial time for the EU’s dairy sector says rapporteur of the draft resolution James Nicholson (ECR, UK), who also steered the Milk Package through the Parliament in 2012.
“On the farm, those who are looking to expand production will have to do so sustainably and invest wisely. But the greatest single challenge facing our dairy farmers is price volatility. And it is here to stay for the foreseeable future,” he said.
According to Nicholson, Europe needs to become global leaders and not global followers – no longer should we be in a situation where we are constantly looking over our shoulder at what New Zealand and the US are doing, he said.
“While there are risks and uncertainties, there are also many opportunities for the dairy sector if we are willing to embrace them. We can start by using the tools we have but using them better”, he said.
Major challenge: Volatile markets
This is the main challenge facing the dairy sector, according to the committee.
And yet the Commission’s capacity to respond rapidly and effectively to market crisis seems to be limited, MEPs say. Existing ‘safety net’ measures such as public intervention and private storage aid alone are neither sufficient enough nor up-to-date to address current challenges in the milk sector, it says.
MEPs are therefore urging the Commission to use new targeted market measures to address the crisis resulting from downwards price pressure, a dip in global demand, price volatility and impacts of Russian embargo on EU food products.
The EU should develop more responsive and realistic crisis instruments and possibly use risk management instruments to take advantage of the volatility in the sector to increase its competitiveness, says the adopted text.
The dairy sector should also get engaged in developing further insurance tools when the market is strong in order to curb milk price volatility ensure proper income for dairy farmers, it says.
Agriculture MEPs also demand mechanisms that would effectively protect farmers from abuses in the retail market and call on the Commission to come up with a proposal to do away with unfair trading practices as soon as possible.
Tackling volatility is among a host of measures including better monitoring of the milk market and increasing funding to the outermost regions of the EU.
Next steps
The draft resolution as adopted by the Agriculture committee will be scrutinised by the Parliament as a whole during the July plenary session in Strasbourg.
